Hedging the yen: a quarter of its value lost in five years, and record interventions
Since 2021, the yen has lost about a quarter of its value against the euro, and Japan has intervened several times to support it, with record amounts in 2026. What this means for an exporter to Japan, what a forward costs, and why the yen is prone to sudden moves.
The yen is the third most traded currency in the world, on one side of 16.8% of FX trades according to the BIS. For a French company selling to Japan, the last five years have been costly: the yen did not just fall, it fell sharply, and in bursts.
Five years of yen decline
A receivable of 100 million yen was worth about EUR 754,000 in October 2021, and about EUR 562,000 in October 2026. Between the March 2022 low and the April 2026 high, EUR/JPY moved by nearly 50%.
A central bank leaving negative rates, a government that intervenes
On 19 March 2024, the Bank of Japan raised rates for the first time since 2007, ending its negative interest rate policy. Japanese rates nonetheless remain below euro and dollar rates, as the forward points show.
To slow its decline, Japan's Ministry of Finance has intervened several times, selling dollars and buying yen:
| Period | Amount | Source |
|---|---|---|
| April – May 2024 (29 April and 1 May) | JPY 9,788.5 billion | Ministry of Finance |
| 27 June – 29 July 2024 | JPY 5,534.8 billion | Ministry of Finance |
| 28 April – 27 May 2026 | JPY 11,734.9 billion | Ministry of Finance |
| 30 July – 26 August 2026 | JPY 15,399.3 billion, a monthly record | Ministry of Finance |
For a company, an intervention is not protection: it is an extra source of volatility. It can abruptly improve the rate on an unhedged receivable — or worsen it as soon as the market resumes its trend.
What a forward costs today
With yen rates below euro rates, the EUR/JPY forward trades below spot: it is the exporter who benefits.
| As of 16 October 2026 | Value |
|---|---|
| Gap between one-year forward and spot, EUR/JPY | −1.43% (177.57 spot, 175.03 one year) |
| Exporter: EUR 1,000,000 receivable in JPY, hedged one year ahead | about EUR 1,014,500, i.e. 1.4% more than at spot |
| Who the forward favours | The exporter selling yen forward; the importer pays the gap |
Implied volatilities measured on public EUR/JPY option trades on 16 October 2026 stood around 7.8% a year, above EUR/USD: yen options cost more.
Pitfalls specific to the yen
- 1Waiting for a rebound
After a sharp fall, it is tempting to wait for the yen to recover before hedging. The last five years show what that wait costs.
- 2Underestimating sudden moves
Interventions and monetary policy shifts produce jumps of several per cent: barrier structures are exposed to them.
- 3Forgetting that the forward pays
For an exporter, the EUR/JPY forward adds about 1.4% a year to the value of yen sold: hedging costs nothing, it pays.
Sources
- Bank for International Settlements, 2025 Triennial Survey: "Global FX trading hits $9.6 trillion per day in April 2025", press release, 30 September 2025.
- European Central Bank, euro reference exchange rates (EXR series), from 15 October 2021 to 16 October 2026; extremes calculated by ELEGG.
- Japan Ministry of Finance, foreign exchange intervention reports: second quarter 2024 (29 April and 1 May 2024: dollar sold, yen bought), 27 June – 29 July 2024, second quarter 2026 (operations on 30 April, 4 and 6 May 2026: dollar sold, yen bought) and 30 July – 26 August 2026.
- Bank of Japan, monetary policy decision of 19 March 2024 (end of negative rates, first hike since February 2007), as reported by the Associated Press.
- Forward points and spot rates captured by ELEGG Finance on 16 October 2026 at 22:17 UTC (source: NetDania), mid rates between bid and offer; ELEGG calculation.
- Implied volatilities: public FX option trades reported to DTCC (CFTC Part 43 dissemination) on 16 October 2026, premiums inverted by ELEGG with the Garman-Kohlhagen model; average of 8 near-the-money EUR/JPY options.
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Frequently asked questions
The questions finance departments ask most often on this topic
How much has the yen fallen against the euro?
According to ECB reference rates, EUR/JPY went from 132.65 on 15 October 2021 to 177.82 on 16 October 2026: the yen lost about 25% of its value against the euro in five years, the yen hitting its low at 187.72 per euro on 17 April 2026.
Has Japan intervened to support the yen?
Yes, several times, selling dollars for yen: JPY 9,788.5 billion in spring 2024, JPY 5,534.8 billion in summer 2024, JPY 11,734.9 billion in spring 2026 and JPY 15,399.3 billion between 30 July and 26 August 2026, a monthly record according to Japan's Ministry of Finance.
How much does a yen forward hedge cost?
On 16 October 2026, the one-year EUR/JPY forward traded about 1.43% below spot. For an exporter selling yen forward, hedging pays about 1.4% compared with spot; for an importer, it costs the same.
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